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1 1 of 5 4/18/2015 9:34 AM Market pressures continue to squeeze the residential alarm business with attrition and alternative solutions. Monitored outdoor protection, adding a layer of perimeter security around an existing indoor alarm, delivers tangible value to actually grow and stay ahead of evolving markets. The alarm market is changing. Home Automation RMR is declining as consumers discover free alternatives sold at big box stores for interactive lighting, locks and thermostats. New DIY alarm systems seek to displace the installer as customers buy direct. A similar wave of self-monitored systems sold through Amazon and BestBuy seek to displace Central Station monitoring. The sky is not falling. Residential dealers now have a new tool to drive up RMR and resign multiyear contracts and deliver greater value with increased protection. What is best is that the solution is still squarely security and not an HVAC upgrade. Perimeter security with priority police response is a strong selling point to enhance alarms where the police respond slowly, if at all. Except for residential, outdoor perimeter security is mainstream and literally everywhere and it is based on video. Outdoor cameras protect cities and public buildings. Sophisticated surveillance systems with elaborate VMS have become standard at large commercial facilities where a single guard at a command post can supervise hundreds of cameras and access points. Securing the perimeter is an important and growing market for the large commercial integrators but is also moving downstream to smaller facilities and into smaller commercial applications. Adding an outdoor camera to a commercial install is the norm. IP cameras and analytics becoming increasingly common and backend improvements in VMS help in outdoor applications. In contrast, outdoor protection for residential applications, meaning single family homes, is still uncommon for mainstream customers of home alarm systems. Outdoor solutions are too expensive, too complicated to install, and too expensive to monitor to gain much traction.

2 2 of 5 4/18/2015 9:34 AM Outdoor Perimeter Kit Homeowners have longed for perimeter protection, but the options didn t make sense, to either the owner or the alarm dealer. While dealers can install door and window contacts on every opening there is no warning of someone trespassing or prowling outside; there is no alarm, siren or police response until after the criminal is actually inside the dwelling. The residential market requires the same perimeter protection as municipalities and commercial property, but at a scale and cost that made sense. Cumbersome installation and expensive monitoring barred the way to a mass market residential perimeter system. New solutions built on wireless installation and filtered monitoring have overcome these barriers and residential perimeter security is now a point of differentiation to drive growth and reduce attrition for alarm dealers. The opportunity is huge. All residential accounts internal residential customers as well as a competitor s residential accounts every existing residential alarm customer is a prospect for a stand-alone monitored perimeter protection kit. The indoor alarm continues to secure indoor areas. The outdoor kit secures the perimeter as an entirely separate system with its own smartphone controls; incremental protection that works regardless of the current alarm provider. Filtered Monitoring The Central Station and monitoring revenue, recurring monthly revenue (RMR), is crucial in the residential market. Monitoring is what delivers police response in the event of a crime. Commercial integrators make their living on selling/installing hardware and delivering a working system to their clients. While these integrators collect their money and move on to the next job, residential alarm dealers install a system and collect a monthly fee for monitoring. Professional monitoring is the differentiator between the alarm business and the integrator. Historically, integrators provided unmonitored outdoor products and monitored alarms stayed indoors, not by choice but by necessity. Outdoor sensors and devices are more active than indoor detectors. More can happen outdoors and that means more false alarms to a Central Station. More false alarms mean that outdoor monitoring costs are 5X higher (or more) than typical indoor monitoring. While it may work in certain commercial markets, expensive outdoor monitoring costs kill the business model. The only residential option was unmonitored surveillance cameras that do not deliver either police response to the owner or RMR for the installer. The monitoring process needed to evolve before dealers could provide outdoor residential protection and filtered monitoring makes that happen.

3 3 of 5 4/18/2015 9:34 AM Filtered monitoring is a new concept that enables the homeowner to filter outdoor video alerts and only send real events to the central station for response. Unless videos of the events are delivered to the homeowner for review, it really is impossible to filter anything. Video sent to smartphones and other mobile devices like ipads make this possible. This perimeter system builds uses a smartphone as the control device for video alerts, arm/disarm, and remote look-in to the battery-powered camera. For the alarm dealer, there is no question that smartphone interactivity creates stickier residential customers and reduces attrition. This perimeter kit can be armed/disarmed from a smartphone independently from the existing indoor alarm as a separate layer of outdoor protection. The perimeter system sends video alerts of activity directly to the homeowner s smartphone for immediate review. Filtered monitoring means that after reviewing the video the owner decides what action to take: disarm, ignore or dispatch. Only after the owner pushes dispatch does the alarm and video clip go to the central station for police response. Filtered monitoring eliminates the excessive false alarms that drive up monitoring costs. Filtered monitoring changes the business model. If the homeowner determines that police response is necessary, a push on the dispatch button delivers the videos to the central station where the operator becomes a virtual eyewitness of the crime. The central station remains the crucial link that delivers priority police response to actual crimes. Filtered monitoring also expands the utility of the OMVs to deliver video alerts that are not necessarily security related. Package deliveries, kids returning home from school, the arrival of the lawn service personnel; the homeowner can monitor activity and either disarm the system to prevent additional alerts or ignore the alert to send it to the archive. Dealers can add indoor detector/sensors for indoor alerts where the battery powered devices can be placed inside the drawer with the jewelry or other valuables, or inside the liquor cabinet or gun closet to generate a video alert of any activity, not necessarily a burglary. Because most existing indoor alarm systems are blind and not connected to cameras, the perimeter system with filtered monitoring delivers another layer of value as a bridge or transition for a dealer to move video verification indoors. Pushing the dispatch button on an indoor alert still delivers priority police response to a video verified alarm. Adding an indoor layer is ideal in cities like Detroit and San Jose where police only respond to verified alarms. Alarm dealers can leave the existing indoor alarm intact and add a separate layer of verified protection indoors and out. Wireless Installation

4 4 of 5 4/18/2015 9:34 AM To be practical, perimeter security must be wireless. If we only consider alarm systems, 90 percent of new residential installs are exclusively wireless. Wireless installation was responsible for expanding the residential alarm market from a 5 percent penetration of wired systems in expensive homes to 20 percent penetration and growing. The residential business model depends on efficient installation and wireless delivers higher margins with less disruption in the home. Wireless here means no cables and battery powered, not Wi-Fi, because Wi-Fi needs power cables. After resolving the monitoring issues, wires and cables are the main reasons perimeter protection isn t workable in mainstream residential. Technology improves and wireless options now exist. A new generation of wireless outdoor sensor/cameras called Outdoor MotionViewers (OMVs) create a batterypowered outdoor ecosystem that works for residential applications. A color video camera, infrared illuminators for true night vision and PIR detector all fit into a waterproof device the size of a coffee cup. In contrast to a Wi-Fi camera, the OMV really has no wires; and radio inside has better range. Like the 900 MHz first responder radios that still communicate when a police officer enters a structure, the OMV uses 900 MHz to penetrate through walls from the perimeter outside. The detector/ camera can operate several years on four lithium AA batteries, depending on duty cycle. A narrow vertical curtain pattern on the PIR motion sensor minimizes needless activations and limits the detection area for residential applications such as front door/back door, deck, outside pool, detached garage, and perimeter hot spots. Police Response Obviously, when it comes to police response, faster really is better. The arrest rate on the typical indoor alarm is 0.04 percent. Beyond attempting to contact a few people on a call list, there was little a central station could do to confirm if an alarm was an actual crime or not. These alarms receive priority 3 police response because even after the central station works the call list, over 95 percent are still false alarms. Video verified alarms, and especially video alarms with filtered monitoring, change the entire paradigm. Monitored video verified alarms receive priority 1 response and deliver more arrests. Once the owner pushes the dispatch button and the operator sees the video, filtered monitoring means police treat this call from the central station as a crime-in-progress. Video verified alarms have documented arrest rates in double digits and arrests remain the best deterrent. Moving this outside only makes sense. About the Author

5 5 of 5 4/18/2015 9:34 AM Keith Jentoft is the president of RSIalarm Inc. He can be reached at (877) Copyright Media, Inc. See our Privacy Policy. Reproduction in whole or in part in any form or medium without express permission of 1105 Media Inc. is prohibited.

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